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2010-UP-196 - Stella Black v. Harold Black

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Stella K. Black, Appellant,

v.

Harold Whitney Black, Respondent.


Appeal from Richland County
James F. Fraley, Jr., Family Court Judge


Unpublished Opinion No.  2010-UP-196
Heard September 1, 2009 – Filed March 8, 2010


AFFIRMED


Jan Warner, of Columbia, for Appellant.

Kermit King, Mary Katherine Sherman, Rebecca West, and Tina Cundari, all of Columbia, for Respondent.

PER CURIAM: In this appeal of a divorce decree,  Stella Black (Wife) alleges error in the family court's decisions regarding findings of fact, alimony, transmutation, valuation of assets, attorney's fees, marital fault, life insurance, and the disqualification of Harold Whitney Black's (Husband's) attorney.  We affirm. 

FACTS

Husband and Wife were married on January 6, 1994.  Each had been married before, and neither had children from their respective prior marriages, nor were any children born of this marriage. 

In 1972, Husband incorporated Whit-Ash Furnishings, Inc., a retail business selling furniture and home accessories in which he is a 51% shareholder.  Husband also owns 49% of The Burton Agency, LLP, which owns real estate, some of which is rented to Whit-Ash. 

Wife alleges that between the fall of 1991 and the parties' marriage in 1994, she performed a number of services that purportedly resulted in economic benefits to Husband and his interests in Whit-Ash and Burton.  After their marriage, Wife maintains she initiated jewelry and gift sales at Whit-Ash, handled television and other advertising, engaged in community activities, and did buying for the business.  Husband contends Wife did not have a position in the business, performed no day-to-day responsibilities, went to the store only sporadically, and when occasionally travelling with other Whit-Ash employees to jewelry markets, would buy items for herself instead of the store. 

In 2003, Wife embarked on a career in the music business.  According to Wife, Husband funded her efforts, deducted the losses on the parties' personal income tax returns, and had attorney Rebecca West, who had been his and Whit-Ash's personal attorney, assist with her endeavors.  In addition, with Husband's consent, other Whit-Ash employees assisted Wife with computer work, travel arrangements, and other tasks associated with her pursuit of a music career.

In 2001, discord in the marriage began to escalate and Husband temporarily left the marital residence.  Upon his return, Wife allegedly became more verbally abusive toward him and in October 2005, the parties had a physical altercation, after which Husband left the marital residence permanently. 

On January 17, 2006, Wife commenced this action, seeking separate maintenance and support, including security for support, equitable division, a finding that certain assets Husband acquired before the marriage had been transmuted or that Wife was entitled to a special equity in them, and attorney's fees and costs.  Husband denied Wife's allegations and counterclaimed for a divorce on the ground of adultery and a bar to Wife receiving alimony. 

The family court issued a temporary order on May 30, 2006, (1) finding Husband had not established a prima facie case of adultery; (2) awarding Wife temporary alimony of $9,000 per month and exclusive possession of the marital home; and (3) ordering Husband to maintain health coverage for Wife, pay the mortgage, taxes, and insurance on the marital home, and advance $30,000 as Wife's suit money and temporary attorney's fees. 

During the pendency of this action, Wife sought unsuccessfully to disqualify attorney Rebecca West from appearing on Husband's behalf on the ground that West had previously represented her when she attempted to establish herself in the music business.  

In the final decree, filed March 4, 2008, the family court granted Wife a divorce on the ground of a one-year's continuous separation, finding neither party was entitled to a divorce based on fault grounds.  In addition, the family court awarded Wife permanent alimony of $5,500 per month and required Husband to secure this award with $1.5 million dollars in life insurance.  Furthermore, the family court declined to find that Husband's interests in both Whit-Ash and Burton had been transmuted into marital property or that Wife was entitled to a special equity in either asset.  Wife received the marital residence subject to the mortgage on the property and was directed to pay Husband $41,000 at the rate of $1,000 per month from her alimony.  Wife also received an additional $45,000 in attorney's fees and costs. 

Both parties filed post-trial motions.  In response to the motions, the court amended its order to reflect Wife's correct date of birth.  The court also reduced the amount of life insurance Husband was to carry to secure his alimony obligation from $1.5 million to $750,000.  On March 31, 2008, Wife filed a notice of appeal.[1]

STANDARD OF REVIEW

"A divorce action is a matter in equity heard by the family court judge; on appeal, the court's scope of review extends to the finding of facts based on its own view of the preponderance of the evidence." Thomson v. Thomson, 377 S.C. 613, 619,  661 S.E.2d 130, 133 (Ct. App. 2008) (citing McLaughlin v. McLaughlin, 283 S.C. 404, 405-06, 323 S.E.2d 781, 782 (1984)).  "However, our broad scope of review does not require us to disregard the findings of the family court or to ignore the fact that the trial judge saw and heard the witnesses and was in a better position to evaluate their credibility and assign comparative weight to their testimony."  Id. (citing Tinsley v. Tinsley, 326 S.C. 374, 380, 483 S.E.2d 198, 201 (Ct. App. 1997)).

LAW/ANALYSIS

1. Wife argues the family court's finding of facts are in error because the court failed to give due consideration to Husband's alleged marital fault and lack of credibility.  We disagree.

Citing McCrosson v. Tanenbaum, 375 S.C. 225, 652 S.E.2d 73 (Ct. App. 2007), Wife argues the family court improperly ignored or discounted evidence that Husband, with the assistance of others in the case wove a "web of deceit" and "engaged in a campaign of egregious concealment, complication, and out and out lying in an effort to attempt to obtain a financial advantage in this case."  "However, our broad scope of review does not require us to disregard the findings of the family court or to ignore the fact that the trial judge saw and heard the witnesses and was in a better position to evaluate their credibility and assign comparative weight to their testimony."  Thomson, 377 S.C. at 619, 661 S.E.2d at 133.  We believe the supreme court's express discrediting of this court's statement in McCrosson about a reviewing court's advantage in an emotionally charged trial is in itself sufficient reason to defer to the family court; however, we also agree with Husband that any misconduct on his part during the litigation pales in comparison with that in McCrossonSee McCrosson v. Tanenbaum, 383 S.C. 150, 151, 679 S.E.2d 172, 172 (2009) (explaining the court of appeals' decision "improperly implie[d] that the family court was 'distracted by an emotionally charged trial' ").  Accordingly, we find no error on the part of the family court.

2. Wife argues the family court erred in awarding Wife permanent alimony of only $5,500 per month.  We disagree.

"An award of alimony rests within the sound discretion of family court and will not be disturbed absent an abuse of discretion."  Craig v. Craig, 365 S.C. 285, 292, 617 S.E.2d 359, 362 (2005).  "Generally, alimony should place the supported spouse, as nearly as practical, in the same position as enjoyed during the marriage."  Id.

The legislature has set forth twelve factors for a family court to consider in determining an alimony award.  These factors include duration of the marriage, the physical and emotional health of the parties, the parties' education, their work experience and earning potentials, the standard of living established during the marriage, current and reasonably anticipated expenses, marital and nonmarital properties of the parties, and marital misconduct or fault.  S.C. Code Ann. § 20-3-130(C) (Supp. 2009). 

As the family court properly addressed the statutory alimony factors, we defer to the discretion of the family court and find no error with the alimony award. 

3. Wife argues the family court erred in declining to find Husband's interests in Whit-Ash and Burton were transmuted into marital property or, in the alternative, that she was entitled to special equity interests in these assets.  We disagree.

Marital property is defined as "all real and personal property which has been acquired by the parties during the marriage and which is owned as of the date of filing or commencement of marital litigation."  S.C. Code Ann. § 20-3-630 (Supp. 2009).  Excluded from marital property is "property acquired by either party before the marriage."  Id.  Non-marital property can be considered to have transmuted into marital property " '(1) if it becomes so commingled with marital property as to be untraceable; (2) if it is titled jointly; or (3) if it is utilized by the parties in support of the marriage or in some other manner so as to evidence an intent by the parties to make it marital property."  Thomson, 377 S.C. at 620, 661 S.E.2d at 133 (quoting Johnson v. Johnson, 296 S.C. 289, 295, 372 S.E.2d 107, 110 (Ct. App. 1998).  "The burden is on the spouse claiming transmutation to produce objective evidence that the parties considered the property to be marital during the marriage."  Pirri v. Pirri, 369 S.C. 258, 270, 631 S.E.2d 279, 286 (Ct. App. 2006).  Evidence of transmutation may include placing the property in joint names, transferring the property to the other spouse as a gift, using the  property exclusively for marital purposes, commingling the property with marital property, using marital funds to build equity in the property, or exchanging the property for marital property.  Johnson, 296 S.C. at 295, 372 S.E.2d at 110-11.  Mere use of the income from a spouse's separate property in support of the marriage does not transmute the property into a marital asset.  Pirri, 369 S.C. at 270, 631 S.E.2d at 286.

Upon review of the record we find the evidence supports the family court's ruling that the non-marital property did not transmute.  Accordingly, we affirm the ruling of the family court.

4. Wife argues the family court erred in its valuation of Husband's interests in Whit-Ash and Burton.  We disagree.

“A family court may accept the valuation of one party over another, and the court’s valuation of marital property will be affirmed if it is within the range of evidence presented.”  Pirri, at 264, 631 S.E.2d at 283.  We find the family court's valuation to be within the range of evidence presented. 

Moreover, we are inclined to agree with Husband that, inasmuch as Wife has not argued that the family court's allegedly erroneous valuations of the businesses led to other errors, this issue is of no consequence.  See Miles v. Miles, 303 S.C. 33, 36, 397 S.E.2d 790, 792 (Ct. App. 1990) (recognizing an overriding rule that "whatever doesn't make a difference, doesn't matter").

5. Wife argues she should have received a larger award of attorney's fees and costs.  We disagree.

The family court may award reasonable attorney's fees and costs based on "the financial resources and marital fault of both parties."  S.C. Code Ann. § 20-3-130(H) (Supp. 2009). 

Attorney's fees awards are within the family court's discretion.  Upchurch v. Upchurch, 367 S.C. 16, 28, 624 S.E.2d 643, 648 (2008).  "In determining the reasonable amount of attorneys fees to award, the court should consider the nature, extent, and difficulty of the services rendered, the time necessarily devoted to the case, counsel's professional standing, the contingency of compensation, the beneficial results obtained, and customary fees for similar services."  Roberson v. Roberson, 359 S.C. 384, 392, 597 S.E.2d 840, 844 (Ct. App. 2004).  Here we find the family court's award of attorney's fees to be within its discretion. 

6. Wife argues she is entitled to a divorce based on the ground of desertion.  We disagree.

A spouse seeking a divorce on the ground of desertion must show "(1) cessation from cohabitation for . . . one year; (2) intent on the part of the absenting party not to resume it; (3) absence of the opposing party's consent; and (4) absence of justification."  Fort v. Fort, 270 S.C. 255, 259, 241 S.E.2d 891, 893 (1978).  "Where the departing spouse has just cause for leaving, her doing so does not constitute desertion."  Smith v. Smith, 260 S.C. 65, 67, 194 S.E.2d 199 (1973).

We find the facts support the family court's refusal to award a divorce on the grounds of desertion. 

7. Wife argues the family court erred in reducing the amount of life insurance that Husband was to maintain to secure his alimony obligation.  We disagree.

Under section 20-3-130(D) of the South Carolina Code (Supp. 2008), the family court "may make provision for security for the payment" of spousal support, and, in conjunction with this provision, may direct a supporting spouse "to carry and maintain life insurance so as to assure support of a spouse beyond the death of the payor spouse."  In this regard, there must be some evidentiary basis to support the amount of coverage ordered; however, this may be in response to an appeal by the payor spouse.  See, e.g., Zangari v. Cunningham, 839 So. 2d 918, 919 (Fla. Ct. App. 2003) (citing cases referencing a requirement that the amount of life insurance coverage required bear some correlation to the projected alimony amounts).  Other recent out-of-state authority holds the amount of life insurance ordered to secure an alimony obligation is discretionary with the court.  See e.g., Braun v. Braun, 907 N.E.2d 681 (Mass. App. Ct. 2009) (wherein after noting an order requiring the payor spouse to maintain life insurance was discretionary, the court further held:  "It follows that the amount of such insurance also rests in the discretion of the judge.")

Here, we find the family court was within its discretion to reduce the amount of life insurance Husband was required to maintain. 

8. Wife argues the family court should have granted her motion to disqualify attorney Rebecca West from representing Husband in this matter.  We disagree.

The comments to the South Carolina Rules of Professional Conduct provide: "After termination of a client-lawyer relationship, a lawyer has certain continuing duties with respect to confidentiality . . . and thus may not represent another client except in conformity with [the Rules.]"  Rule 407, SCACR, Rule 1.9 n. 1 (2009).

In this case, the family court determined West obtained no confidential information through her representation of Wife, and because Wife communicated no "substantial information" and because such information was communicated through third parties or involved interactions between Wife and third parties, such information was not entitled to attorney-client privilege.[2]  Notwithstanding that Wife fails to substantiate what legal remedy, if any, is afforded her by the Rules of Professional Conduct on appeal; we find the record supports the family court's finding that West gained no confidential or "substantial information" during the course of her limited representation of Wife.  Furthermore, we find it compelling to note, as did the family court, that the information creating the alleged conflict could have been obtained from other sources, such as the Wife's affidavit and the Temporary Order, all of which were filed before West was a named counsel for Husband.  For these reasons Wife has failed to demonstrate any prejudice, and we therefore affirm the ruling of the family court.  See Davis v. Davis, 372 S.C. 64, 86, 641 S.E.2d 446, 458 (Ct. App. 2006) (stating that this court will not reverse the family court unless the error is material and prejudicial to the substantial rights of the appellant).

CONCLUSION

For the aforementioned reasons, the ruling of the trial court is

AFFIRMED.

HUFF, THOMAS, and PIEPER, JJ., concur.


[1]  Wife also filed an unsuccessful petition for a writ of supersedeas with this Court to reinstate the temporary alimony award. 

[2]   We recognize that the family court also found that even had the attorney-client privilege arisen, Wife implicitly waived any objection of West's representation of Husband.  While we need not decide whether Wife's affirmative act of placing her earning potential in question, for the purposes of alimony calculation, constitutes a waiver of privilege, we do find that without West possessing any confidential information, the record in this matter and the jurisprudence of this state support the family court's indication that Wife's delay of over one year from the time West became Husband's counsel, over ten months from the date of the deposition in which Wife protested West's presence, and over nine months after Wife's attorney served West with the Notice of Appearance, waived any objection to West's representation of Husband.  See   Bakala v. Bakala, 352 S.C. 612, 623, 576 S.E.2d 156, 162 (2003) (noting that when a party becomes aware of ex parte communication he must make a timely objection or such objection shall be deemed waived); Swenton v. Swenton, 336 S.C. 472, 486, 520 S.E.2d 330, 338 (Ct. App. 1999) (finding that a party has waived an objection to arbitration by participating without objection); Patterson v. Patterson, 288 S.C. 282, 284-85, 341 S.E.2d 819, 820 (Ct. App. 1986) (recognizing that a party may implicitly waive objection to a judge's failure to recuse himself by proceeding with trial without objection when the fact(s) allegedly mandating recusal is known).